Bad debts and fraud drive Bradford & Bingleys �196m loss

By Sean Farrell 800PM GMT nineteen March 2010

Bad debts and rascal expostulate B&B"s �196m loss Photo BLOOMBERG NEWS

The bank pronounced in the annual inform that the pre-tax loss was �71m improved than the foresee in the commercial operation plan, that was concluded with the Treasury. The loss was additionally reduce than the �278m homogeneous loss in 2008.

The association set in reserve �884m in residential loan provisions, up from �468m in 2008. The enlarge was formed on an inner examine in to the bank"s uneasy loan book last year that threw up a series of "potentially questionable debt portfolios".

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The assign for residential impairments rose by �101m to �572m and the bank set in reserve �52m for residence cost falls this year. Provisions for rascal and veteran loosening some-more than doubled to �388m from �175m.

The bank pronounced scarcely 30,000 commercial operation were some-more than a month in balance on their debt at the finish of 2009, down from 31,500 a year earlier. Arrears of 3 months or some-more appearance at 21,500 in Apr but fell behind to about 19,000 by the finish of the year.

The bank"s waste in the initial full year of nationalisation show up the mismanagement of Bradford & Bingley prior to the was supervision took carry out in Sep 2008. The supervision sole the branches and assets commercial operation to Santander and took over the bank"s unsure lending book to run it down.

For years, the former construction multitude insisted that the specialisation in buy-to-let mortgages and alternative unsure home loans was a protected plan but 2008 saw loan waste mountain and the bank make known that it had a big bearing to debt rascal that concerned overvaluing of properties.

Nationalisation followed dual botched rights issues and an acknowledgment by the association that it had not speckled surging bad debts inside of the business.

Chris Willford, the former financial director, and Roger Hattam, who was operations director, left at the finish of Jun and will embrace their salaries, grant contributions and salaries until the finish of May. Mr Willford warranted �946,297 last year and Mr Hattam was paid �651,442.

Richard Pym, the former Alliance & Leicester trainer who is right away Bradford & Bingley"s chairman, warranted �361,313 last year and has waived his on trial reward of �187,500.

Richard Banks, additionally a comparison ex-Alliance & Leicester banker, warranted �261,799 for his work given fasten in April, together with a �30,000 bonus. He has paid in instalments remuneration on �10,000 of the bonus.

Mr Banks pronounced "We have finished the restructure to emanate an organization that is fit for role to broach a high peculiarity use to the commercial operation while shortening costs, minimising waste and delivering worth to the taxpayer."